U.S. Auto Sales Revised Downwards: 14.95m in '08
Previously, on "this is going to get really bad," analysts had predicted that the U.S. new car market in '08 would crater to 15.7m units. According to Dealer magazine, J.D. Power's mob have had another look at the situation and shaved another 800k units from the annual sales forecast. J.D. reckons the industry will only shift 14.95m "light vehicles" (cars, SUVs, minivans, etc.) this year. To put that in perspective, U.S. dealers moved some 16.15m light vehicles in 2007; down 2.5 percent from 16.56m in 2006. Or, less statistically, "New-vehicle sales in 2008 are expected to reach their lowest levels since 1994." J.D.'s executive director of automotive forecasting says the trend established in the last two months is a sign of things to come– only more so. "While the automotive industry's slow performance in January and February certainly contributes to the anticipated drop in new-vehicle sales," Jeff Schuster warned. "Declining consumer confidence and spending, as well as turbulent financial and economic market conditions, are primarily driving the decline." The good news: J.D. is predicting a "slow rebound" in auto sales during the second half of '09 into '10. The bad news: they could be wrong.
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Because then you would have to live in Detroit.
Actually, why buy a new car when you can buy an often depreciation-ravaged 3 year old with the best years of it's life ahead of it?
By 2009, the pressure on the Detroit auto makers may well increase with the scheduled introduction dates of several Chinese cars (though they consistently over-promise and under-deliver in every aspect, including delivery dates) as well as Mahindra light trucks and SUVs from India, with diesels and later, promised hybrid diesels. Interestingly one of the first Chinese built cars (but probably not the very first) will be Chery vehicles rebadged as Dodge products (first in Mexico, probably followed by Canada then the US). Assuming Chrysler survives (which I suspect won't be the case). With the big 2.8 dealerships drying up left right and center, a lot of owners are going to be looking for the "next" Toyota, and a lot of them think that some Chinese company may be "it". Look for Chinese cars in the US within 3 years, at the latest. Chamco and Brilliance, for two, are supposedly ready to start imports within six months (and have been, for at least two years! - sarcasm). Brilliance even managed to redesign and improve their crashworthiness to something resembling 2nd world standards instead of non-existant 3rd world standards after some disasterous Euro NCAP tests which found their way onto YouTube.
BTW just for laughs I drove through the local 'biggest dealer in town' where they have been making Kia (no joke) the best-selling car locally ("if you have a job and $111, you can have a new Kia for $111 a month" - they forget to mention, of course, that the payment will go on longer than the car). This, despite also having a Chevrolet franchise literally just up the street. The Kia dealership now has a used vehicle center sign up on half of the massive lot, with new cars now taking up about 1/2 the space that they did prior. As for the Chevy dealership space, they have about a zillion pickups all sitting there, and sitting there, and sitting there, and.... Thus it is pretty crystal clear that the smart and successful dealers are pulling back quickly with the knowledge that the market is tanking. So in that sense, the AA strike is a Godsend to GM, which no longer has to feel as if they must crank out unordered pickups and force them down the throats of the long suffering dealer network. Because, there aren't any buyers.